The JKL Restaurant had sales revenues and food costs in 2009 of $800,000 and $600,000,respectively.In 2010,JKL will be introducing a new menu item that will generate $100,000 in sales revenues and $40,000 in food costs.Assuming no changes are expected for the other food items,the differential operating profit for 2010 is

Question

Quizplus · Accepted Answer

The differential operating profit is found by subtracting the differential food costs from the differential sales revenues. 
Differential sales revenues = $100,000 
Differential food costs = $40,000 
Differential operating profit = $100,000 - $40,000 = $60,000 
Therefore, the best choice is C.

The JKL Restaurant Had Sales Revenues and Food Costs in 2009